Understanding Post-Petition Debts in Chapter 7

When you file for bankruptcy, chances are that you will continue incurring debt even after the petition is filed. After all, filing for a Chapter 7 bankruptcy doesn’t stop your expenses. So what happens to the debt that collects after you’ve filed and the debt that continues accruing during the bankruptcy process? Are these included in your Chapter 7 petition or are they excluded as new debt?

How Post-Petition Debt Works in Chapter 7

The general rule of thumb is that the debt you have before your Chapter 7 bankruptcy will be discharged as a result of your Dallas bankruptcy. However, any debts that accrued after the Chapter 7 petition are not discharged, as they are considered post-petition debt. In short, pre-petition debt is discharged and post-petition debt is ignored during a Chapter 7 Texas bankruptcy. Seems straightforward, right?

Unfortunately, identifying whether or not a debt is pre or post-petition is actually trickier than it sounds. Here are some general rules concerning your debts in a Chapter 7 filing:

Monthly payments. Any regularly payments, such as your mortgage, car loan, and other monthly payments that are occurring before you file for a Chapter 7 will be discharged. Furthermore, any monthly payments that continue happening after the petition itself are included, since the monthly payments began before the petition. However, the lien on the property remains in place despite the bankruptcy filing.
Reaffirmed debt. When you file for a Chapter 7, you have the opportunity to reaffirm your debt – confirm that you still want to keep making payments so that you can keep the assets. If the debt is reaffirmed, you must continue making payments beyond the bankruptcy, or else your creditors may come after the debt for any deficiencies.
Sandwiched debt. If you acquire new debt that is sandwiched between the Chapter 7 filing and the discharge itself, this debt will not be included and will still remain your obligation. Again, the only exception is if this debt is part of a monthly payment plan that was in place before you filed.

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